227. Infinite Banking Concept: Why Consider It?

[00:00:00] Speaker A: You were listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your host, Richard Canhield and Jason Lowe as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on. So how exactly do you decide to just implement the infinite banking concept without even understanding how it works? Why would you even consider doing that? Well, we're going to find out today because we've got an incredible guest, a client of mine, Clayton Smith, joining us now, Clayton is a certified engineering technologist. He understands mapping and geo mapping and all kinds of crazy important things around data. He's got a 25 year amazing experience based out of the city of Edmonton. He now focuses all that knowledge base and that energy on real estate, media and mapping, doing cool drone footage and all kinds of amazing things for both realtors and even for people in government who need work done in that environment. So really, really cool aspects. With his company C five projects now, Clayton has embraced the infinite banking concept. He's been an infinite banker for a number of years and I have some of the most epically incredible meetings with Clayton and our discussions take a really diverse and fun tracks. And so I'm excited about having him on the program for a while. And so, Clayton, thank you for joining Jason and I on the, on the program today. [00:01:28] Speaker B: Well, thank you very much, Richard. It's a pleasure to be here. I hope you didn't, didn't over promise with your, with your intro there, but sounds, sounds pretty good so far. [00:01:37] Speaker C: Tell us a little bit more about your business. It sounds really interesting. This was the first time that we had an opportunity to be introduced to each other and it sounds interesting. Share a little bit more about the context of what your business does and the value that it creates. [00:01:53] Speaker B: Well, thank you, Jason. I kind of stumbled onto the idea about a year ago, just on a road trip. I was kind of on a little bit of a, I call it a sabbatical. You know, it's, sometimes you get these unexpected opportunities, as we say in life. And so I went on a sabbatical and I came out to BC, which is actually where I'm at right now for the moment. I was out on a walk and I saw, I walked by a real estate office on Vancouver island, and the real estate office had these nice pictures of houses and they had these maps, they had floor plans with each of the houses. And I thought, huh, well, I can do that. I can make those things up. And so I started to dig into that a little bit and looked into one particular opportunity. There was sort of a franchise that was attached to it, but I thought I wanted to go in a little bit of a different direction, and I wanted to take a lot of the experience that I've had over the years and some of the interests that I've had and combine that into sort of a business that I wanted to do. And the more I kind of looked into things, I got some more ideas and I started picking up some equipment. I started buying some. I bought a laser, laser, a lidar laser measuring device, I bought a 360 camera. And these were just kind of, at that point, were just kind of toys to play with. And then I bought a drone. And I thought, okay, well, this is kind of interesting and fun. And then I talked to a friend of mine who was a real estate agent, I known him for years. And we talked about it a little more and it kind of sounded like he would be my ideal client and he could definitely help me get started with some business. And so I thought about it a little more. I thought, okay, well, maybe, ah, what the heck, let's just get this thing started. And it didn't really, didn't really feel real until I bought the commercial liability insurance and all that good stuff for $2,000 and switched my car over to a commercial policy and all that sort of stuff. And I thought, okay, well, now I got to make some money to feed these overhead expenses here now. So as time went on, I just started to do a little bit of work for this client, took some drone footage, started making some videos of properties. And over the last several months, we've had a chance to do quite a bit of business there and have made a number of videos for properties. It tends to be that a big chunk of my business now is making videos for properties to really showcase them, highlight the highlight the offering, tell a little bit of a story about the properties, and show people a compelling reason why they should get excited to buy it. [00:04:40] Speaker C: Wow, thats really, really good. And you caught the infinite banking concept intuitively, knowing that you wanted to begin implementing it without being in a place where you had complete clarity or the deepest understanding that maybe you were seeking. [00:04:59] Speaker B: Why? Well, I guess I first came across the concept years ago and was intrigued by it. And then I had another opportunity to start implementing it. We decided to sell our house and it was in 2016. I think the economy in Alberta was kind of starting to go on the downslide. We can get into some of the political reasons as to why? But we'll take a long time in this chat to do that. But suffice it to say we sold our house in early 2016. And then we had that equity from the house. We cashed in some of that. And it's like, okay, well, I got some of this. Okay, I can put it into an RRSP, which I did for some of it, paid down some other debts, which I did there. And then I thought, you know what? I've always wanted to try this infinite banking thing. And there was one fellow that I knew, Richard. We'd met a number of years ago, just in, just from real estate meetings and so forth years before. So I thought, I'm going to give Richard a shout. And we met and by that time I already decided I wanted to do it. I just wasn't sure on the exact mechanics of it and how it all worked. And Richard gave me the book how to become your own banker. And I skimmed through it and I thought, okay, well, I already know I want to do this anyway, so I'll skim through it, skim through it and let's get going. And Richard asked me a bunch of questions about it and things like that. And I thought, yeah, okay, well, let's just go ahead and we got started. [00:06:38] Speaker C: That's wonderful. [00:06:39] Speaker A: Yeah. The fun thing is, I think Clayton gives himself maybe not as much service as he needs to because he asked a lot of questions. And he's very inquisitive. He's a very curious person. I naturally gravitate to people who also have a thirst for knowledge. You like to know things and you know, and you put a lot of time and effort into thinking through what a lot of your questions are. So we've had a lot of great meetings since that day and beyond. And it's led to growing your system. You know, you have, every member of the family is involved in the family system. Uh, and, you know, there's been a lot of. Of growth and stuff that's happened in there. And of course, living in a world where the world itself around us changes, as you mentioned, the political environment leads to the economic aspect. So being in Alberta, there's ups and downs. And over the last decade we've seen a lot of those things. We can, everyone who's from or familiar with what's been going on, Alberta will know that. And so that's created both opportunities and challenges along the way. But the infinite banking concept or the system of policies that you have has been growing and maturing over that timeframe and your background in real estate. We met through real estate investment circles. You were a member of the rain group for a long time. As was I. As was Jason. So, in fact, literally before we hit the record button, we were doing a shout out to the amazing Don Campbell and how much we value his great take on what's behind the curtain, as he used to call it. And so I think there's a great aspect of your real estate background that really is kind of like a connection point to how this infinite banking concept is showing up in your life and probably even to a large degree, how it became a part of your life in 2016. What comes up for you when you think about the knowledge base you have about real estate and also being a private lender and then how the infinite banking concept sort of intersect in those environments? [00:08:38] Speaker B: Well, yeah, now that you mentioned it, there were a number of things that did intrigue me about the infinite banking concept. And I think the thing that probably took the longest amount of time for me to wrap my head around was the fact that you borrow back out of your policy and there's no set repayment terms by the insurance company. It's just, you just borrow it out and they dont care if you never pay it back because they know youre good for it because when you die, they get the money back. So of course there is interest that accrues the whole time. So, I mean, it is in your interest to pay that down as soon as you can. But having the amount of control over those repayment terms in my mind, I think was huge. We talked about particular scenarios when I started those policies up, but I thought, okay, well, theres this big policy premium that's going to be due here. What happens if I lose my job? And we talked about scenarios to go around that. And as it turned out, a few years later, I had the opportunity to exercise that contingency plan. So we've been just, actually, it's been a resource for me to draw on and utilize during the time that I've been in a, in a transition from going from an employee to now a business owner. So I found it's been a very, very useful tool and it's a very unique tool that most people don't know and they don't understand it. And I don't know, for some crazy reason, I just decided to embrace the whole concept. [00:10:22] Speaker C: Yeah, it's having a degree of control. It, the desire for any degree of control over how you finance things. We find that with all the people that we meet with and talk to, which is we're in conversation constantly about this concept with people who have varying degrees of knowledge. And when you began your journey with this concept, you one of the things that sensing that you did realize is that youre not taking control of the entire banking function in your life as it relates to your needs. Its meant to be achieved gradually and incrementally. But you saw the advantage of control and you didnt need 100% control to get started. You said, okay, I know im going to have some degree of control. And that compelled you to say, this is, this is really important to me. This is a unique advantage of conducting my financial affairs this way. And we meet with people who have a varying sense of, well, if I cant control at all, then maybe ill just wait until I can before I get started. And its like, you cant read about push ups, you got to do them. Whether you start being able to do two or youre much more physically fit and you can do 100, you can't read about it. You got to just get down and start doing them. And then you have a good coach that walks you through proper form so you don't injure yourself. In other words, you know, don't, don't steal the peas and repay your policy loans and all those great things. But it's really interesting to hear, you know, your perspective, especially considering your engineering background and realizing that when something is designed properly and theres also contingency and buffer built into that design, it merits having a really close look under the hood to say, hey, how is this thing put together? [00:12:24] Speaker B: Jeff? Yeah, agreed. And I dont even know if I could really say that. I still dont fully understand how it all works. I know Richard and I have talked a number of times and we talk about the internal rate of return on the policies and all that. Im just like, okay, okay, that's good. For some reason in my mind it just works. And I think that the big thing for me was it was the control aspect that I really enjoyed about this. And it's to the point I look at every other type of investment now and I look at it through a lens of degree of control that I have when it comes to things like an RRSP or an RESP, any kind of registered government savings program, to me theyre almost like a jail for your money. Youre very limited on how much control you have. Yes, there is the tax shelter aspect of it. Depending on a persons financial plan, it may or may not make sense. But for me now, I look at the fact that the amount of control you give up. I think it kind of diminishes the tax deferral aspect because you're still going to pay taxes on it at some point anyways, and you don't really get to enjoy that money or the use of that money during the whole time that it's in that registered plan. And philosophically, I'm of the mind that registration leads to confiscation and the more money that you have in a registered plan, well, I think it's just a bigger target, a big juicy target for high taxing governments. And we don't know anything about that in Canada here, do we? So I think that if you can get it outside of that, you kind of change your view on the tax shelter aspect and you want to look at it as the control shelter aspect. How much control over my money can I really get from these various vehicles? So I stopped contributing to rrsps well before I went into my employee to business owner transition. I stopped contributing to rrsps then and I focused mainly on just building up my policy room. [00:14:50] Speaker A: This September 12 is don't spread the wealth day, a copy of our new book, don't spread the wealth, how to leverage the family banking system to own all the gold, make all the rules, and enjoy generational riches. This book is jam packed full of incredible bonuses that we've put together, including our 15 page guide to hosting your own family banking meetings. Pre order your copy today using the link down in the description or visit don'tspreadwealth dot that's don'tspread wealth.com. learn how to keep the money in the family so you can prosper together for generations to come. You mentioned something, you know, about confiscations, and I kind of had this picture in my mind of, you know, like a fruit tree and the fruit tree bears fruit, of course, and seasonally, you know, you're going to, you're going to pick the low hanging fruit first, you know, before you make your way up the tree. And it kind of like, it seems to me like the government has kind of planted fruit trees and then they water them every February by having the banking system market to you to go put your money into the thing that produces the fruit. And it's kind of keen to look at your journey and your experience. Clayton, and the idea of control, you mentioned that several times. And basically the value of control. And so that value is going to mean something different to everyone. But you could almost, if you really probably took the time to think it through, you could put a monetary value or almost like a percentage on it. So it's like, hey, maybe I've got a, I can go do a private loan over here where it's going to pay me twelve or 13%. But if I did it in the environment where I had control versus I didn't have control, what amount of that percentage do I equate to my feeling of control? And there's something thats intangible, but yet you feel it in a tangible way really, as you put your head on your pillow. Its really connected to what happens in your life. And just the idea of, again, a circumstance which presented an opportunity for you to leave your regular position and forge ahead into a new world. Not exactly all of that by choice. I would say given won't go into the whole government. [00:17:06] Speaker B: No, not at all. We'll say that for an I think due to disclosures, I probably can't go too far into it. So. [00:17:13] Speaker A: But needless to say, you found yourself with an opportunity to transition out of your past career and that freedom. I mean, we had several meetings about that and around how you have multiple policies. How's the premium going to work really getting clear again on what the minimum is versus what the potential is and understanding where you're at in the system, how when you put a dollar in, you're getting more than a dollar back on the system already and giving yourself a little bit of breathing room and peace of mind to know that it's not as restrictive. And I think also an important piece of that, something you mentioned earlier, the idea of not having to repay loans, it's not that you don't have to, but just knowing that the potential is there, there's the knowledge. When you're learning, when people are exploring this concept, they hear, oh, great, I have control over my loans. That sounds really good. But just because it sounds good and you hear that and you might know that to be true, to actually experience it is different. And I think what you were really trying to hit home on is you were aware, you read it on the book, you read the papers, we had the meetings, you understood, but you didn't really truly feel it until you had the experience of, oh yeah, ive got these outstanding loans, like, no ones shown up in a van with a life company logo on the side and a bunch of heavyset Guido looking fellas came out with baseball bats asking me for a loan repayment. So theres the piece of like all of a sudden having that real awareness, even though you knew that, you didnt really know. And I feel like youve gone through that experience now and thats sort of what youre referencing. Am I on track there? [00:18:50] Speaker B: Yeah, id say you captured it pretty well. Yeah, yeah. You know, I've gone in circles around this a number of times about the control aspect, and that was a big one. The fact that you control your repayment terms and that gives you the flexibility to invest the money how you want to. And it also makes you consider what you are investing into. Anybody that's done any kind of business in the past, I've got several, several examples of some dogs and some boneheaded decisions that I've made that have cost a lot of money. And you have to take your lessons, you have to take your lumps. And when you're borrowing that money out of a policy to make an investment, you do have to make some calculations. And what happens if this investment doesn't turn out? It's like, okay, well, yeah, the policy is still growing. It's going to take a little more time to pay the loan back, but that all kind of factors into the calculation. And when you look at your rate of return on making a particular investment, like I recently made a private loan that was secured on across a few properties and vehicles. And so I looked at the source of the funds and it was a combination of lines of credit and policy loans. And as I have more money coming in, my plan for that is any kind of money coming in is basically going to go straight to the policy or it'll just go pay down any credit lines that I have and then go to the policy. For me, I look at it as one or it's going to happen anyways. But if I get into that habit of running that money through the policies, then it just keeps it on the radar all the time. And I'm keeping some of those numbers at the forefront. [00:20:40] Speaker C: Well, when you initiated that borrowing, you did so from the life insurance company without reducing the assets value. [00:20:49] Speaker B: Thats right. [00:20:50] Speaker C: And thats one thing that we communicate so often, especially nowadays, when were in a different interest rate environment than weve been accustomed to for many years. So when people really grasp that element of it, okay, I can contribute the amount of capital to the system that I've chosen to be the amount of capital that's comfortable and affordable. I can borrow against this asset without reducing its value and without triggering a taxable event. I'm paying no tax on the daily buildup. I'm paying no tax on the death benefit proceeds. The policy itself is the greatest exemption that exists in the canadian and american tax code. How much of my capital do I not want residing there? From that place you can go and do these things that you like. A sharp example. You said you had a high caliber opportunity, presumably that it was high caliber to lend capital and you were able to take advantage of that high caliber opportunity. But it wasnt an all or nothing, meaning you didnt have all of the financial energy available from your system of policy. So you utilized that in combination with existing lines of credit. Well, don't banks joint venture on deals all the time? [00:22:13] Speaker B: Sure. [00:22:14] Speaker C: Hey, you take a portion of your capital pool, I'll take a portion of mine, we'll put it into this deal and everybody wins. It's the very same thing. You're just sitting in a different seat. [00:22:25] Speaker B: Now and with a little more control of the absolutely of the process and how it's executed. Yeah, yeah. [00:22:32] Speaker A: I think people really need to take heed of something you stated, Clayton, and it's that the habit, you know, you've, you have developed and you've put a lot of focus on developing the habit of having capital or money or income as it comes in going to the policy first. And that goes down to behavior, goes down to mindset. And I know when we first started this, it was more about, hey, what's left over that we can use to fund premiums or to build our system with. And over the period of years through a lot of really fun, very engaging, very thinking, curiosity oriented conversations that we've had, very enjoyable for a lot of reasons, but a lot of it has been, hey, well, what if we did this? Oh, and then what if, and so there's like little discoveries that kind of take place and we've moved from, hey, dealing with the money that we have left over, which is what most people are trained in our brain, gets us to think about to now, what about the flow of money thats going through our hands? And youve really transitioned a lot of things there. And another thing kind of comes up for me is given the circumstance of transitioning from working for someone else to working for yourself, theres a bit of an ability to, for lack of better term, control some of your income. To some degree, you cant necessarily control your next client. But if you have, if you know that youre in a different income tax position now, you have taxable accounts, registered accounts, you can now control a little bit better your ability to remove strategically that capital, melt those things down in now a preferential tax. The whole purpose of those is to be able to take them out in a tax preferential environment. And youve found yourself in a position where thats created. So theres a decided, well, where do we do with it? Well, hey, we still need to pay premium. We still want to pay premium. Well, now we have a way that we can start exiting capital from ABC system and moving them over into our XYZ system that weve created, and we could do it in a strategic format. So theres been a lot of really cool things that have kind of transpired over the journey so far. Thats shown almost a breadth of opportunities on how you can allocate your own funds. [00:24:49] Speaker B: Well, yeah, its given me a chance to experiment with a lot of ideas that ID had over the years. I know before the transition you and I had actually talked about, the idea popped into my head. I remember we were discussing this about collapsing my RRSP and just getting it all into my policies, because to me it made more sense from a control aspect and from just, well, mostly on the control aspect. And as far as what I was doing with my rrsps, they were mostly in cash, so I wasn't doing a lot with them. And then the same with my pension fund as well from work. So there's been opportunities now to transition a lot of that out of those money jails, as I call them, and get them into policies and into just working. So during that time where I was on a sabbatical, I thought, okay, well, wait a second, this is kind of the time where we're supposed to be collapsing rrsps. Maybe not this soon in life, but when your income drops, that's the idea behind an RRSP. You take it out when you're in a lower tax environment or in a lower tax bracket. So I thought, okay, well, I'm in a pretty low tax bracket now. Now is the time to start pulling this stuff out. And so ive been doing that, and ive had some pretty, you know, as far as my refunds have gone, I mean, yeah, I was a free loan to the government for a while when I pulled the money out, and then they had to give some of that back to me. But ive had a chance to now cycle that back through my policies and through some of my other investing activities. [00:26:29] Speaker C: Clay thats incredible, Trey. And so to any of our, you know, newer viewers, newer listeners, what would you say to them about how you went about investigating this concept, and what would you say to them in your own words? [00:26:49] Speaker B: Start as soon as you can. Looking back, if I had started these policies in my twenties, I probably would have been in a far stronger financial position by the time I turned 40 a number of years ago. And I think that in hindsight, for me, for the way my mind works, it probably would have made more sense to build equity inside of a life insurance policy than it would have been to buy real estate. The fact is that, that the policies and the lending ability on those, it works like a HELOC, but you've got far more control because you don't have the monthly payments that are required at the end. So you have total control over your repayment schedule. And sometimes you need some money to do a project, well, you might not get paid from that project for two months or six months. Well, knowing that, at least you don't have a cash flow issue during that time, while you're waiting for your money to come back. And then when your money comes back in, well, boom, you just dump it back into your policy, pay the loan off, and go on to the next thing. So, starting early is probably a big thing. Thinking back, just as I'm talking, thinking back to earlier in our chat here, you'd asked about the experience in real estate and how that relates back to some of my thinking now. And I think that, Richard, something you said early on when we were getting the policy started, you said that it was basically like real estate without walls. And once I started getting into it, I thought, yeah, this has almost all the financial benefits of real estate. Without the political risk of property taxes skyrocketing by 7% a year, this year, next year, the year after that, you don't have to worry about unclogging a toilet with an insurance policy. I mean, it's not quite as perfectly matched like that, or juxtaposed like that, but there are a lot of benefits. And when you look at the, when you look at the amount of time that it takes to build equity in a policy versus building equity in real estate. If you were to think about, and this is something that I thought of when I first got involved in real estate. So if property values go nowhere for 25 years, at least you've got some pay downs. So you've got some equity building up just from your rental partners, your customers, your tenants, as some people call them, they're helping you to pay down that mortgage over a number of years. Well, it's a little different here because you're not necessarily borrowing the money to build equity in your policies, although you can. And that was another experiment that we had an opportunity to. Because I did borrow during. Well, when I had my job, I mean, I borrowed money to max out my contribution room and my policy and. [00:30:09] Speaker A: Being in a position where you can decide to what degree and to how do you want to go about building your future. And also, I think what you're really trying to tie into, Clayton, is something that I think our listeners should understand is recognizing that you have the ability to plan around known events. So this is something that Nelson didn't come out and tell me this directly, and I don't know if he did for you, Jason, but its, I think something that just accumulated of repetition over time. We talked about planning for windfalls and planning for windfalls. And we think about a windfall as were going to sell property. Maybe theres a death claim and a state value in the future. Theres something of that nature thats planning for windfalls, but theres also planning for known events. So known events would be like, my kids are going to be exiting school and, or, you know, they're so we're no, they're going to take over their own expenses. They're going to move out of the house. I don't have to feed, you know, two ginormous teenagers, whatever, steak dinners three times a week. And they don't eat, you know, 18 pounds of meat and ground beef or whatever. So like, what is that cost base? [00:31:22] Speaker C: Well, he used to talk about how all that extra cash flow that would come back. [00:31:27] Speaker A: Yeah. And, and so there are known events like that and you know, being aware of them, being familiar with them and seeing, seeing people with families, like large families, and thinking about what just what they're spending on their food budget or they got, their kids are in gymnastics, they're in hockey, they're in dance class, they're in all these things, you know. Okay, so what is that costing you? Like recently I did an experience with somebody and their kids are in a competitive sport. And Jason, you're very familiar with that. And I had them go through and actually add up, what does it cost them for the tournaments, for the outfits, for the equipment that they need, for the gas and the fuel that they do every week? What is it costing them for the actual cost to attend these sessions, for private coaching? And before they know it, they actually did the spreadsheet and they didn't realize it was $32,000 a year. Yeah, $32,000 a year of after tax money. So they're spending a full salary every single year of gross income of one of the partners, one of the family members just to support the vision of what they want to do for their kids. Now your kids are only going to be that age at one time. There's a reason they want to do that. There's competition, there's skills that they want them to learn. There's relationships they want them to build. There's value in that. It's not a financial value. It's a value of experience that you want your kids to have. And, and what is that going to mean for them in the future? So you're making a decision about what value do you want to provide or, and, or extract into the future. But it's not necessarily monetary, but there's a monetary cost to creating that value. And so you take that into consideration. Okay, great. We got $32,000 a year. Well, we're going to do that for how many more years? Roughly about three or four more years. And now we're going to start having the kids start taking over those expenses and we're going to slowly bring that down based on they're going to have to pay for this, this and this. And then eventually were not paying for it at all anymore. Okay, well, thats six years out and its phasing down and then were going to. And so you can now think through that experience of what that future looks like. And if you know that thats going to happen and its reasonably known, I mean, you cant 100% predict the future, but you can be very reasonable about whats a high probability likely occurrence. And then you could start changing things that you do today based on that reasonably known outcome, including the way you think about funding your system. Maybe you might owe on your system a little bit more today because you know that in three years, because you started earlier, you got that next policy. Lets just say now, in three or four years, youre going to actually start replenishing the pool because, but you didnt have to wait. You gained three extra years on the backend of your life, three extra dividends that are building up over time. So there's not suggesting that everyone would go about doing that. But it's a thinking exercise because Nelson taught us it's all about how we think. [00:34:19] Speaker C: Yeah. And it has nothing to do with should I invest my money in X? Should I invest my money in Y? Should I invest my money in Zed? Should I invest my money in insert whatever financial product here you're dealing with the money that's already flowing through the family's hands and thinking about when it's going to be flowing into the family's hands. Big difference. [00:34:45] Speaker B: Big difference. That reminds me of something that we talked about before, Richard. I used to have these savings jars. So it'd be a savings jar for vacations and for just spending and things like that. And the illustration that you went through a long time ago was how you're building up the savings. Building up the savings and then you kill the savings. And then you have to replenish that account again. And then you kill it again. Well, instead of doing that, it finally made sense to me after a while. It's like, well, why not get that money into the policy first and let that continually compound for as long as the policy is in service? So for the rest of my life, presumably, and ill have opportunities to pull that money back out of the policy again in the form of a policy loan. And then all I have to do is take the money thats coming in anyway that I would normally save in a jar, so to speak, and I would just pay the policy loan back. And so its the same amount of money basically thats flowing through. Instead, Im just running it through the policy. And as Im running it through the policy, Im allowing that continual compounding to keep on going for the rest of my life. So it made a lot more sense after I started doing it. Of course, it started to make a lot of sense. And all of these things that I've done with the policies, they've been experimental. And I had an opportunity years ago to take a chunk of money and get a policy started. And it was kind of an experiment. And in a lot of ways, that experiment has turned out to fairly well. And probably it probably allowed me to, you know, take this opportunity, you know, to go on the entrepreneurial journey now and, you know, versus, if I hadn't gotten it started, it might have held me back from making, you know, the choice to whether to stay or to, you know, head down this path or not. So, so, yeah, it's, I guess like life. Life is but a series of experiments when you think about it. We can get philosophical about that. But, yeah, I imagine we'll want to keep things on track here. [00:36:57] Speaker C: The late Bob Shields, God rest his soul, he wrote the book titled you don't have to die to win. And one thing that he shared, this was not too long before he passed away. He said, if you really want to save money, repay policy loans. And Clayton, you just described, you just described that activity based on your own firsthand real experience, experimentation. And so it made me think of Bob Shields and some of the things, his nuggets of wisdom that he used to share. [00:37:39] Speaker A: There's one really cool thing that Nathan that, sorry, Clayton started to do early on, which I thought was interesting, and he kind of shared with me how he was going about doing it. I thought, well, thats really cool. Would you record a bit of a video just telling me about that? And this was a number of years ago, maybe its in 2018, 2017 that we did this. So actually, folks of our clients can go to the ascendant membership site and they can see this video. Its in there. And it kind of circled back to the jars a little bit. But it was, you put a little spreadsheet together and you were starting to be an honest banker and pay yourself and starting to do it with, you know, the family, with your wife and your, and your children on smaller items, smaller expenses. You went and bought clothes. Okay, well, everyone's got clothes in their budget, but instead of just buying the clothes, you were taking these smaller expenses, things in the $100 range or even less, and you were making a repayment schedule on those little items and doing it on a bi weekly basis. And you would break it down to these small increments. Now, there's a little bit of work at no camera. There's a little bit of work in that. But part of the work in doing that was about going through the behavioral, habitual, mental experience of, well, if I can do it on this big scale, why can't I do it on the little scale and getting a little bit more clear about that? And you weren't taking a policy loan to do this hundred dollar item. Like, people start to think, oh, I need to go take a policy loan to do it. Like, no, I took money was in my savings account or whatever. I had to go buy the clothes we needed. You know, my daughter needed new shoes. So the money is being spent. I, let's be intentional, like, get really clear on how we're replacing it and let's add 10% on it. So that's one thing that you started to do very early on. And I haven't seen a lot of other people really begin doing it in that way. And so I really want to commend you for that. Not only, but like, part of that, Clayton, I think is important to express because that's part of your learning style. It's part of your learning journey. So the way that you began to implement this at the micro level enhanced how you could think about doing it on the macro level. And I think that's an important takeaway for our listeners to understand that practice begins with practice. You know, Nelson or Jason talked about the push ups. You have to do something, and it doesn't have to be this big grand thing. It doesn't have to be, you know, I need $45,000 for a flip project on a real estate deal like people, or I need, oh, I got to buy a new truck and it's an $80,000 truck. I need to have enough money to go do that tomorrow. I'm like, how about I, I'm going to go buy, you know, I'm going to go buy an Oilers hockey jersey, and they're $200 or whatever. They're going to be a lot more after this next series is finished. And they're, you know, they're going to, either. They're going to, we're going to go repay that to our system. So there's a way to bring this down at the, at the, at the moderate level and get incremental practice. And that incremental practice builds to larger and larger ideas and results and opportunities. And I think that's kind of what the journey has been for you, even though we've maybe never stated it like that. [00:40:31] Speaker B: Yeah, you know, that reminds me. Yeah, that, that is, that's kind of how I got started in. You know, I looked at it as experimenting or practicing, but, yeah, I mentioned before I had the, these savings jars, so we would have a savings jar for vacation, for example, or just for spending. So, yeah, how I started doing that was to just put some of these lessons into practice. So I would have, if I wanted to go on a weekend getaway and say it was $500, well, if I had $1,000 saved up in my vacation fund, I would take that into a number of payments over several weeks, then I would just take that off of my, I actually had automatic transfers set up to put that money back into the account. And so the account would grow just from doing that. And it was money coming in anyway because it was from a job. And so I just timed the payments to go into this other, or timed transfer to go from the account that my paycheck came into. And then that same day, it went to the other account. So the other account was still kind of growing. And so I thought about that after a while, probably a year or two of doing that, and I thought, oh, okay, well, this is kind of how it works. This is what Richard was talking about. And then I just decided to just, it just made sense at that point to just put the money into the policy first and then take it back out from there. Because with the pulling the money, when you pull the money out of the savings account, you're stopping any kind of compounding effect even though bank accounts weren't paying any interest back then anyways and they're still really not. But at least when the money is put into the policy, you're always, you're taking advantage of that compound growth. So it just made sense for me to just run through the policies at that point. [00:42:16] Speaker A: Trey, whats key about that is that experience and that practice is what led to natural expansion. So people say, well, how do I grow and how do I expand my system? Like, well, wed asked Nelson. He said, well, as soon as, as soon as your mind can conceive of doing so. So because you were doing the stuff, it prompted the question, hey, I need to talk to Richard. Hey, Richard, im doing this like maybe I should just get another policy. And I'm like, okay, well maybe you should do that. Walk me through your thought process. Help me show, show me more about what you're doing so we can see if it makes sense to expand versus cool. Clayton, let's go ahead and get that illustration done and get it submitted right now. You know what I mean? So there's, there's this great conversation that takes place about your own thinking and how your thinking leads to, you know, how your future can grow around your system and you did the work. I didn't jump in and call you and say, hey, Clayton, why don't you put your money in jars and then why don't you set up all these automated transfers and then, hey, Clayton, once you have enough money in the account, why don't you give me a call? We'll get you a policy. It's not how it happens. It's the exact opposite. [00:43:20] Speaker B: Right. [00:43:20] Speaker A: Right. And I think that's important for people to take away because they kind of want this roadmap of how do you do everything. But the reality is how you do everything is different than how I do it and how Jason does it. And so you need to find your way. And then by actually doing it, you're going to create capacity to grow and to expand. [00:43:42] Speaker C: There's two most important words in the title of this book, your own. That's what Nelson was trying to impart upon people, is that this is about becoming your own banker and doing it in such a way where you truly feel like you are the one in a position of control, but you're exercising your imagination. You're thinking about your thinking, not Richard's, not Jason's, but your thinking. And then you're putting a process in place that works for you and for your family. And so, Peyton, today was awesome. [00:44:18] Speaker B: Thank you. [00:44:19] Speaker C: Yeah. Thanks for being here with us. And, Rich, do you want to take us across the done line? [00:44:25] Speaker A: Yeah, let's do it. Clayton, as always, I always appreciate our conversations. They're much more than just having chat about a policy. We go down very many different rabbit holes, which is always fun. So I appreciate that about you and just your general openness. Now, you may not know this, of course, but when you decided to come on our program today to share a little bit about what your journey with this process has been, you don't realize, but someone's going to watch this, and that might be the tipping scale for them to decide that this is something you need to implement in your life. And so, in that regard, you're already showing up as a hero. But what we really just want to understand is who would you most want to be a hero to? [00:45:07] Speaker B: Well, my kids. I have started policies, started policies a number of years ago for the kids. And, you know, I was kind of realistic, you know, when it came to parenthood. A lot of times when you tell kids something, you've got to do something, you got to think of something a certain way, they tend to do the opposite. So what my philosophy was was just kind of to be somewhat influential and influential, maybe plant some seeds of thought into their minds, and then maybe sometime in their mid twenties, they might go, oh, yeah, you know what? Dad was talking about this years ago, and he was kind of right. And. And some of that is starting to happen. My. Both of my kids are now in their early twenties. My oldest daughter is working. She's got a full time job, and she's. We're starting to have some conversations every now and then about her, you know, kind of taking over the policy, what that would entail and things like that, and how she would buy the policy and. And then in turn, take it over, and it would be a financial instrument for her to utilize down the road. And if she started now in her mid twenties, then by the time she was my age, in my mid forties, mid late forties now, I could conceivably be financially free just from. Not just from the policy itself, but the kind of thinking that it requires to be able to utilize it. And by looking at. At money flowing through your life in a whole different lens, just implementing that at an early age will lead to financial freedom, I think. So, to answer your question, yeah, if I could be a hero, I would be a hero to my kids. And if there's one or two or a handful of people that are watching this sometime down the road, maybe next week or a week after whenever it's posted, or in a year, and it kind of turns the light bulb on for them. Well, then that's, that's great, too. [00:47:09] Speaker C: Well, and that's about the right quantity of our audience. You know, one, two people. I'm just kidding. We are sincerely grateful for our north american audience that is growing each and every day. And so, Clayton, thank you so much again, being with us and to all of our viewers. You, you just saw another video show up that we are recommending to you because there's no such thing as having arrived at knowledge and courtesy of our wonderful editing team, they have shared this video that we're recommending so that you can continue your journey of learning. So, gentlemen, make the rest of your week outstanding. This was a lot of fun. Have a great rest of your day, guys. [00:47:48] Speaker B: Thank you very much. You as well. Take care. [00:47:51] Speaker A: Thanks for listening to the wealth without Bay street podcast where your wealth matters. Be sure to check out our social media channels for more great content. Content, hit subscribe on your favorite podcast player and be sure to rate the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode where we continue to uncover the financial tools, strategies, and the mindset that maximize your wealth. Our channel.